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Contributors
K. Lloyd Billingsley - Contributor
[Courtesty of Pacific Research
Institute]
K. Lloyd
Billingsley is Editorial Director for the Pacific
Research Institute and has been widely published on topics
including on popular culture, defense policy, education reform,
and many other current policy issues. [go to Billingsley index]
 Disable
Pension Fraud
And
Enable
a Defined-Contribution System...
[K.
Lloyd Billingsley] 1/17/05
In
his address last week, Governor Arnold Schwarzenegger called
for a 401(k) style defined-contribution
pension system for state workers. In a January 24 hearing on
pension issues, state legislators should consider the evidence
for why such a system is necessary. Lucrative disability pensions
are becoming the rule rather than the exception in some counties.
A disability pension is 50-percent tax free and provides half
the employee's salary for life and up to 100 percent for the
employee's spouse if the employee dies. In L.A. County alone,
according to a January 3 Los Angeles Daily News report, about
1,200 former county employees draw yearly pensions of $100,000
or more and 10 draw from $210,434 (together more than $2.1 million
a year) to $316,047 annually, nearly $1 million in three years
for a single person. Such rich benefits set strong incentives
and, to judge by the numbers, disability pensions are easy to
get.
In 2002, 85 percent of L.A. county's firefighters grabbed disability
pensions, according to the Daily News. Over the past decade,
an average of 79 percent of L.A. County firefighters were granted
disability pensions. A full 56 percent of L.A. County sheriff's
employees were also granted such pensions, the high point coming
in 1994 at 67 percent, more than two thirds. These numbers vie
with the California Highway Patrol.
In 2002, according to the Daily News report, 82 percent of CHP
officers took disability pensions and, historically, 67 percent
of the force retires in that way. But some disabled retirees
show an astonishing ability to perform such strenuous and stressful
jobs as scuba instructor, deputy sheriff of Yolo county, and
director of security at San Francisco airport.
Only a statewide case-by-case review will tell how many disability
retirements are bogus but certainly a great many are, perhaps
the majority. Legislators must ignore protests from apologists
of the system and address this problem. They should bear in mind
that salaries and pensions for government employees in California
are already generous. CHP employees, for example, may retire
at 50 with 90 percent of their salary for life.
If any disability claim turns out to be false, that should be
fraud under the law. The pension should be revoked and charges
filed. Legislators should also take a hard look at the doctors
who approve disabilities claims that turn out to be bogus. Such
approval is malpractice and should be grounds for revocation
of a medical license.
All disabilities should
be completely work related and legitimate. Medical science,
not psycho-babble, should be the rule. An L.A.
county firefighter, for example, sought a disability for his "phobia" about
entering burning buildings. What this person needs is not a disability
pension but a different job. The role of attorneys is also worthy
of review and the secrecy surrounding the system needs to be
dispelled.
These are not "personnel" matters,
as stonewalling bureaucrats and strident union bosses claim,
to be shielded from
taxpayers, the press, and policymakers. They are issues of compelling
public and law enforcement interest. Legislators must let the
sun shine in.
They also need to disable a ludicrously lenient system that
rewards fraud and insults both taxpayers and the genuinely disabled.
To solve California's long-term pension problem, legislators
should aim for a defined-contribution 401(k) style system for
state workers. CRO
copyright
2005 Pacific Research Institute
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